Treasuries Close Firmly Negative As House Approves Tax Reform Bill

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The bill could soon become law, with a Senate vote expected Tuesday night.

The core of the tax plan, which was first unveiled in final form on Friday, is a massive and permanent cut to the corporate tax rate, dropping it from 35 percent to 21 percent.

The House revote will occur on Wednesday. Republicans cheered as House Speaker Paul Ryan announced the vote. Those in the top 1 percent, earning over $733,000, would see average tax cuts of $51,140.

The bill would bring average initial tax cuts for Americans across all income lines, but by 2027, it would boost average levies for everyone earning up to $75,000, which includes most taxpayers, Congress' nonpartisan tax analysts estimated Monday.

The end-of-year sprint represents a remarkable recovery of Republican fortunes since the middle of this year, when the party's drive to dismantle former Democratic president Barack Obama's Obamacare health-care law crumbled in the Senate and prospects for a tax overhaul seemed doomed by party infighting.

"This is going to make such a positive difference in the lives of everyday working Americans from all walks of life", Ryan said during a pre-vote victory press conference Tuesday morning. Asked if he was concerned by recent polling that shows the bill to be broadly unpopular, Ryan said he had "no concerns whatsoever", and he blamed the perception on misinformation. North Dakota Senator John Hoeven said the loss of Section 199 would be offset by a new provision that would prevent higher taxes for cooperatives and their farmer members.

In addition to the complexity and uncertain outcomes of the bill for individual families, another challenge is that benefits will be hard to discern for many until April 2019, when the 2018 tax filings are due. The plan also makes it harder for banks to deduct the costs of Federal Deposit Insurance Corp. premiums.

At the end of last week, to win the support of Sens.

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Rubio had been holding out for a bigger child tax credit for low-income families. The $1,000 per child tax deduction would grow to $2,000, with up to $1,400 available in IRS refunds for families who owe little or no taxes.

Reps. Darrell Issa, R-Vista, and Dana Rohrabacher, R-Hungtington Beach, were the only two California Republicans to vote against the GOP bill, as they said they would.

But the deduction that millions use in connection with state and local income, property and sales taxes would be capped at $10,000.

Their long-sought political goal within grasp, Republicans in Congress are set to catapult sweeping $1.5 trillion tax legislation through the House, rolling over a dozen GOP defectors from high-tax states.

There are still a few hurdles for the bill, though they now appear to be easily surmountable.

A Senate vote later in the day on Tuesday is expected to seal the deal. And Sen. Thad Cochran has also been dealing with illness, potentially leaving Republicans with just 50 votes and no margin for error.

The GOP tax bill polls far worse. That includes Sen. Bob Corker, the only Republican to vote against the Senate's initial tax bill, who said in a statement at the end of last week that he would back the new, compromise version, despite his earlier concerns about projections that the legislation would add almost $1.5 trillion to the deficit over a decade.

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